The value and desirability of diamonds sold in the gem and jewelry trade depend heavily on the quality characteristics of the diamond (e.g., color, cut, and clarity). One important factor in valuation is the color of the diamond. The vast majority of diamonds bought and sold in the gem and jewelry trade are colorless or exhibit a slight yellow tint, with colorless diamonds being more valuable.
Another class of diamonds exhibiting strong color characteristics comprises a very tiny fraction of the market. Such diamonds are known within the trade as “fancy” and exist in various colors, such as canary yellow, pink, blue, green, red, and purple. Such colored diamonds are rare, accounting for perhaps 1 (or less) in 10,000. As such fancy colored diamonds are rare, they can be much more valuable. For example, a 1 carat fancy colored pink diamond may be valued at $1 million or more. Other colors, such as brown, light yellow, yellow-brown, and even black exist, although such diamonds have much less value than those characterized as “fancy” colored.
Because of the great value of fancy naturally colored diamonds, there have been attempts to alter the color of natural diamonds so as to result in an altered diamond exhibiting fancy color. Such altered color diamonds can generally be differentiated from naturally fancy colored diamonds by sophisticated analysis techniques, and are valued at prices significantly lower than naturally fancy colored diamonds. Such altered color diamonds fill a demand within the market for fancy colored diamonds at a relatively lower price point.